Marketing Efficiency Ratio (MER) measures what percentage of your order revenue is spent on advertising. Lower is better—it means more revenue per ad dollar.
MER = ( Total Ad Spend ÷ Total Order Revenue ) × 100
| Metric | Definition |
|---|
| Total Ad Spend | Combined advertising spend across all connected platforms |
| Total Revenue | Total order revenue including shipping and taxes |
| Metadata | |
|---|
| Type | Percentage |
| Data Source | Shopify, Meta Ads, Google Ads |
| Aggregation | Ratio |
Example
Your Shopify store generated $200,000 in total revenue while spending $40,000 on advertising.
| Metric | Value | Calculation |
|---|
| Total Ad Spend | $40,000 | All ad platforms |
| Total Order Revenue | $200,000 | All Shopify orders |
| MER | 20% | ($40,000 ÷ $200,000) × 100 |
How It Works
MER is the inverse of ROAS expressed as a percentage. While ROAS tells you how much revenue per ad dollar, MER tells you what portion of revenue goes to advertising. MER is often preferred for budget planning because it directly shows ad spend as a percentage of revenue.
When to Use
| Scenario | Action |
|---|
| Budget planning | Set target MER as percentage of projected revenue |
| Cross-channel comparison | Compare MER across platforms |
| Profitability analysis | Ensure MER leaves room for margins |
| Trend monitoring | Track MER over time to spot efficiency changes |
| Metric | Relationship |
|---|
| MER (Gross Sales) | MER using gross revenue before discounts/refunds |
| MER (Net Sales) | MER using net revenue after discounts/refunds |
| ROAS | The inverse metric (revenue per ad dollar) |
| Total Revenue | The denominator in this calculation |
